(2)Any
nonissuer transaction in an outstanding security by a
registered dealer if:

a.The issuer has a class of securities subject to registration
under Section 12 of the Securities Exchange Act of 1934 and has been subject to
the reporting requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934 for not less than 180 days before the transaction; or has filed and
maintained with the commission for not less than 180 days before the transaction
information, in such form as the commission, by rule, specifies, substantially
comparable to the information which the issuer would be required to file under
Section 12(b) or Section 12(g) of the Securities Exchange Act of 1934, or the
securities have been the subject of an effective registration statement within
180 days before the transaction, or the issuer is required to file and has
filed all reports under Section 13 of the Securities Exchange Act of 1934, or
the issuer is exempted from registration by Section 12(g)(3) of the Securities
Exchange Act of 1934, it or its predecessor in interest has been in existence
for at least five years, the security is listed for trading on a foreign
securities exchange and has been trading for at least six months and continues
to trade on such exchange, and the aggregate market value of shares, the
ownership of which is unrestricted, is not less than $500,000,000; or

b.The issuer is an investment company registered under the
Investment Company Act of 1940 and has been subject to the reporting
requirements of Section 30 of that act for not less than 180 days before the
transaction; or

c.The security has a fixed maturity or a fixed interest or
dividend provision and there has been no default during the current fiscal
year, within the three preceding fiscal years, or during the existence of the
issuer and any predecessors if less than three years in the payment of
principal, interest, or dividends on the security;

(3)Any nonissuer transaction effected
by or through a registered dealer pursuant to an unsolicited order or offer to
buy;

(4)Any transaction between the issuer or other person on whose
behalf the offering is made and an underwriter or among underwriters;

(5)Any transaction in a bond or other evidence of indebtedness
secured by a real or chattel mortgage or deed of trust or by an agreement for
the sale of real estate or chattels if the entire mortgage, deed of trust, or
agreement, together with all the bonds or other evidences of indebtedness
secured thereby, is offered and sold as a unit;

(6)Any sale or the offering for sale of any security at any
judicial, executor's, administrator's, guardian, or
conservator's sale, or at any sale by a receiver or trustee in insolvency or
bankruptcy;

(7)Any transaction executed by a bona fide pledge without any
purpose of evading this article;

(8)Any offer or sale to a bank, savings institution, credit
union, trust company, insurance company or investment company as defined in the
Investment Company Act of 1940, pension or profit-sharing trust, or other
financial institution or institutional buyer, or to a dealer, whether the
purchaser is acting for itself or in some fiduciary capacity;

(9)Any transaction which is part of an issue of which there are
no more than 10 purchasers [other than those designated in subdivision (a)(8) of this section] wherever located, of securities from
the issuer during any period of 12 consecutive months if:

a.The issuer reasonably believes that all the buyers are
purchasing for investment and not with a view to distribution, and such issuer
exercises reasonable care to assure this investment intent, which reasonable
care shall be presumed if the following conditions are satisfied:

1.Reasonable inquiry to determine if the purchaser is acquiring
the securities for himself or herself or for other persons;

2.Written disclosure to each purchaser prior to sale that the
securities have not been registered under the act and, therefore, cannot be
resold unless they are registered under the act or unless an exemption from
registration is available;

3.Placement of a legend on the certificate or other document
that evidences the securities stating that the securities have not been
registered under the act and setting forth or referring to the restrictions on
transferability and sale of the securities; and

b.No commission or other remuneration is paid or given
directly or indirectly for soliciting any prospective buyer; and

c.No public advertising or general solicitation is used in
connection with the issue of which the transaction in reliance on this
exemption is a part.

§§8-6-3 through 8-6-9 shall not
apply to any offer made pursuant to this subdivision (a)(9)
in which no sale results.

But the Securities Commission may by rule or
order, as to any security or transaction or any type of security or
transaction, withdraw or further condition this exemption or decrease or
increase the number of purchasers permitted, or waive the conditions in
paragraphs a. and b. of this subdivision (9) with or without the substitution
of a limitation on remuneration.

(10)Any transaction pursuant to an offer to existing security
holders of the issuer, including persons who at the time of the transaction are
holders of convertible securities, nontransferable warrants or transferable
warrants exercisable within not more than 90 days of their issuance, if:

a.No commission or other remuneration, other than a standby
commission, is paid or given directly or indirectly for soliciting any security
holder in this state; or

b.The issuer first files a notice specifying the terms of the
offer and the Securities Commission does not by order disallow the exemption
within the next five full business days;

(11)Any offer, but not a sale, of a security for which registration
statements have been filed under both this article and the Securities Act of
1933 if no order of denial, suspension, or revocation is in effect and no
public proceeding or examination looking toward such an order is pending under
either act;

(12)The issuance of any stock dividend, whether the corporation
distributing the dividend is the issuer of the stock or not, if nothing of
value is given by stockholders for the distribution other than the surrender of
a right to a cash dividend where the stockholder can elect to take a dividend
in cash or stock;

(13)Any transaction incident to a right of conversion or a
statutory or judicially approved reclassification, recapitalization,
reorganization, quasi-reorganization, stock split, reverse stock split, merger,
consolidation, or sale of assets; or

(14)An offering of securities conducted solely
in this state to residents of this state in which:

a.The issuer of the security shall be a for-profit
corporation or other for-profit entity, or business cooperative with its
principal place of business in the state of Alabama and registered with the
secretary of state.

b.The transaction shall meet the requirements of
the federal exemption for intrastate offerings in section 3(a)(11)
of the Securities Act of 1933, 15 U.S.C. § 77c(a) (11), and SEC rule
147.As such, securities must be offered
to and sold only to persons who are residents of the state of Alabama at the
time of purchase.Prior to any offer or
sale pursuantto
this exemption, the seller shall obtain documentary evidence from each
prospective purchaser that provides the seller with a reasonable basis to
believe that such investor is a resident of the state of Alabama.

c.The sum of all cash and other consideration to
be received for all sales of the security in reliance upon this exemption shall
not exceed one million dollars ($1,000,000), less the aggregate amount received
for all sales of securities by the issuer within the twelve months before the
first offer or sale made in reliance upon this exemption.

d.The issuer shall not accept more than five
thousand dollars ($5,000) from any single purchaser unless the purchaser is an
accredited investor as defined by Rule 501 SEC regulation D, 17 C.F.R. 230.501.

e.The issuer must reasonably believe that all
purchasers of securities are purchasing for investment and not for sale in
connection with a distribution of the security.

f.A commission or remuneration shall not be paid
or given, directly or indirectly, for any person’s participation in the offer
or sale of securities for the issuer unless the person is registered as a
broker-dealer or agent under the Act.

g.All funds received from investors shall be
deposited into a bank or depository institution authorized to do business in
Alabama, and all the funds shall be used in accordance with representations
made to investors.

h.Not less than Ten days prior to the use of any
general solicitation or within fifteen days after the first sale of the security
pursuant to this exemption (provided no general solicitation has been used
prior to such sale), whichever comes first, the issuer shall provide a notice
to the commission in writing or electronically on Form CF1.The notice shall specify that the issuer is
conducting an offering in reliance upon this exemption and shall contain the
names and addresses of the following persons:

1.The issuer;

2.Officers, directors and any control person of
the issuer;

3.All persons who will be involved in the offer or
sale of securities on behalf of the issuer; and

4.The bank or other depository institution in
which investor funds will be deposited.

i. The issuer shall not be, either before or as a
result of the offering:

1.An investment company as defined in section 3 of
the Investment Company Act of 1940, 15 U.S.C. § 80a-3, or subject to the
reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, 15 U.S.C. § 78m and 78o(d); or

2.An investment adviser as defined at Code of
Alabama, 1975, § 8-6-2(18), nor a person who otherwise provides investment
advice as a service or for a fee.

j. The issuer shall inform all purchasers that the
securities have not been registered under the act and, therefore, cannot be
resold unless the securities are registered or qualify for an exemption from
registration under Code of Alabama, 1975, §§8-6-4 through 8-6-11.In addition, the issuer shall make the
disclosures required by subsection (f) or SEC Rule 147, 17 C.F.R. 230.147(f).

k. This exemption shall not be used in conjunction
with any other exemption under the Act except the exemption to institutional
investors at § 8-6-11(a)(8) and for offers and
sales to controlling persons of the issuer.Sales to controlling persons shall not count toward the limitation in
paragraph (14)c.

l. This exemption shall not be available if the
issuer, or any of its officers, controlling people or promoters is subject to a
disqualifier enumerated at Code of Alabama1975, §8-6-9.

m. Nothing in this exemption shall be construed
to alleviate any person from the anti-fraud provisions at Code of Alabama,
1975, §8-6-17, nor shall such exemption be construed to provide relief from any
other provisions of this Article other than as expressly stated.

n. Every notice of exemption provided for in
paragraph h. above shall be accompanied by a non-refundable filing fee of
$150.Such filing fee shall be deposited
in the Alabama Securities Commission Fund in the State Treasury to be drawn
upon by the commission for its use in administration of this article.

But the
Securities Commission may be rule or order, as to any security or transaction
of any type of security or
transaction, withdraw, further condition or expand
this exemption.

(b)The Securities Commission may by order deny or revoke the
exemption specified in this section with respect to a specific security if it
finds the sale of such security would work or tend to work a fraud upon the
purchasers thereof. No order under this subsection may operate retroactively.
No person may be considered to have violated this article by reason of any
offer or sale effected after the entry of an order
under this subsection if he or she sustains the burden of proof that he or she
did not know and in the exercise of reasonable care could not have known of the
order. In any proceeding under this article, the burden of proving an exemption
from a definition is upon the person claiming it.

(c) Any individual, corporation, partnership, or association who
makes application to the Securities Commission for any exemption from full
registration under subdivision (a)(9) of this section
shall be assessed a filing fee in the amount of three hundred dollars ($300)
upon application for such exemption. The fee shall accompany the application
and shall not be refunded whether the application is approved or rejected. Fees
collected under this subsection shall be deposited in a special account in the
State Treasury for the use of the commission in the administration of this
article.